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TMI Blog2017 (6) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s appeal challenging confirmation of disallowance of ₹ 9,66,828/- being 1% of turnover only on presumptions, ignoring the ITAT decision in assessee's own case for AY 2007-08 where the observation has been made that the brokerage ranges from 2% to 4%. 2. The brief facts are - the assessee had paid total commission of ₹ 29,00,532/- to various brokers who procured the business for the assessee as well as shared the responsibility of guarantee payments and supply of goods. The Assessing Officer issued summons to brokers out of which five brokers appeared and confirmed having received the commission of 3%. One Shri Pankaj Somani stated to have earned 1% commission and Ashma Shah stated that she did not remember having done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Silk Mills, Prop. Umadevi Fatehpuria (assessed in this Ward), engaged in the business of grey cloth, brokerage is paid @ 0.50% to 1% for the A.Y. 2009-10 and in the case of Mohit Rayons (assessed in this Ward), engaged in the business of yarn, brokerage is paid at uniform rate of 1% for the A.Y. 2009-10. 4.14 So far as argument regarding higher rate of G.P and thereby reasonableness of brokerage payment, it is to be mentioned here that disclosure of higher rate of G.P would not justify the brokerage payment because the payment of brokerage has no nexus with gross profit margin. Having regard to all these facts of the case, I hereby consider the brokerage payment at 1% as reasonable. Therefore, brokerage payment in excess of 1% pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are similar to AY 2007-08 where ITAT held that 70% sales of assessee's cloth were made through Bombay Brokers who were del credere agent with a responsibility of payment; therefore, the Revenue's appeal was dismissed vide order dated 21.06.2013 in ITA No.3217/Ahd/2010 for AY 2007-08. 6. Ld. Departmental Representative, on the other hand, contends that both the ld. Assessing Officer and CIT(A) has given clear finding of facts that the facts of AY 2007-08 are clearly distinguishable to the facts of AY 2009-10. The Assessing Officer has demonstrated in paragraph 4.9 in his order that the assessee has purchased goods only from one party M/s. Kalpana Textile through five brokers which is not a business reality. A comparable case w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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